Corridor Chronicles—Profiles of Cross-Border Activities in the Greater Subregion

This is a colorful account of a 19-day journey along the new or upgraded economic corridors linking members of the Greater Mekong Subregion. Based on conversations with ordinary folk, especially entrepreneurs, these stories show how trade and tourism in particular are burgeoning with improving connectivity between People’s Republic of China’s Guangxi and Yunnan provinces, Viet Nam, Lao People’s Democratic Republic, and .

About the Greater Mekong Subregion (GMS)

The Greater Mekong Subregion (GMS) is made up of six countries—Cambodia, People’s Republic of China, Lao People’s Democratic Republic, , Thailand, and Viet Nam. In 1992, these countries launched a program of subregional economic cooperation to enhance their economic relations, building on their shared histories and cultures. Focusing on “three Cs”—connectivity, competitiveness, and community—the GMS is closely involved in pursuing high-priority subregional projects in nine sectors. These are transport, telecommunications, energy, environment, agriculture, tourism, trade facilitation, investment, and human resource development.

About the Asian Development Bank

ADB's vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region's many successes, it remains home to two thirds of the world's poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration.

Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. CORRIDOR CHRONICLES Profiles of Cross Border Activities in the Greater Mekong Subregion

Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org Publication Stock No. ARM090137 Printed in the Philippines GREATER MEKONG SUBREGION ECONOMIC CORRIDORS

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1 Profiles of Cross-Border Activity

Guilin 6 GUANGXI, PRC Gateway to the South I NDIA Myitkyina Dali Hexian o Chuxiong Kunming 24 00'N Longshuanka Wuzhou VIET NAM Baise GUANGXIZHUANG 10 New Dawn in Highlands Yuxi AUTONOMOUS REGION 24o 00'N Tamu YUNNAN PROVINCE Tonzang Muse PEOPLE’S REPUBLIC OF CHINA Gejiu Yulin Nanning Chindwi VIET NAM Salween (Thanlwin) 16 Hill Tribes Rely on Tourists Lashio Hekou Pu’er Youyiguan Pingxiang Qinzhou Lao Cai HuuNghi nR Thibaw Fangcheng . Jinghong Lang Son Dongxing YUNNAN, PRC Business on the Move YenBai Mong Cai

20 Mandalay Mengla Daluo Mohan HA NOI Kengtung Nateuli Boten HoaBinh Loilem Tachilek Luang Namtha MaeSai LAO PEOPLE’S Ninh Binh GulfofTonkin MYANMAR Chiang Saen Chiang DEMOCRATIC REPUBLIC Thanh Hoa NAYPYIDAW Khong Luang Prabang Pyay Phayao Vangvieng Table of Contents Pakkading A y Ban Lao e y Phrae a w

a d Denchai y Thakhek Uttaradit Dong Ha Sukhothai Hue Pathein Tak Kaysone Phomvihane Yangon Mae-Sot Kalasin T HAILAND Salavan Mawlamyine Kamphaeng Dung Quat Phet LAO PDR Opening Up a Tranquil Land Gulfof Chaiyaphum 26 Phouvong VIET NAM Martaban Dietri Ye LAO PDR Better Access to Health Care QuyNhon 32 Ayutthaya Dawei Stung Treng A NDAMANSEA THAILAND Crossing the Mekong Chonburi CAMBODIA 36 TonleSap Trat Myeik Sattahip

THAILAND Phitsanulok—A Regional Hub? GulfofThailand KohKong 42 MocBai Prachuap Khiri Khan Bavet Ho ChiMinh City Sre Ambel o Vung Tau 10 00'N CAMBODIA Bolstering Tourism 46 Chumphon Ha Tien o 10 00'N Kawthoung Can Tho

Ca Mau 54 CAMBODIA Cross-Border Entrepreneurs NamCan N National Capital City/Town Corridor Chronicles was conceived by Ronnie Butiong and coordinated by Charisse Tubianosa. Ian Gill wrote 050 100 200 300 Greater Mekong Subregion Trang the stories and took the photographs, with the invaluable assistance and guidance of Lei Kan, Dang Huu Cu, Economic Corridors Kilometers Souphavanh Phonmany, Roykaew Nitithanprapas, and Chantha Kim. Design by Tony Victoria, Ronnie Elefaño, HatYai Narathiwat River and Keech Hidalgo; typesetting by Aileen Magparangalan and Edith Creus. Yala Provincial Boundary International Boundary NOTE: In this publication, “$” refers to US dollars. Boundaries are not necessarily authoritative. Currency equivalents are as of December 2008. MALAYSIA 98o 00'E 108o 00'E Introduction Profiles of Cross-Border Activity

he stories in this publication are snapshots Three examples—which all include border points— of various cross-border activities captured are the stretch between Jinghong and Mohan in during a 19-day trip along the Greater the PRC, Highway 3 between Boten and Houayxay Mekong Subregion (GMS) North−South and in Lao PDR, and the link between Poipet and Serei TSouthern Corridors in January 2009. Saophoan in Cambodia.

The journey began in Nanning, Guangxi As the stories show, the roads are opening up a host Province, People’s Republic of China (PRC) and of opportunities for businesses big and small. In included northern Viet Nam; Yunnan Province, PRC; Kunming, capital of Yunnan Province, PRC, at least the Lao People’s Democratic Republic (Lao PDR); one major flower producer has started sending daily Thailand; and Cambodia before ending at Bavet, container trucks down the 1,800-kilometer highway Cambodia’s border with southern Viet Nam. to Bangkok. They deliver roses, lilies, and carnations—bound for Southeast Asia and the It was a timely trip as some sections of the Mideast—and bring back orchids. In Jinghong, a highways had been recently built or upgraded. petroleum trader is importing gasoline and diesel

In societies with isolated health care in rural areas, a road can make a difference between life and death.

• In Kunming, one major flower • In Cambodia, these children producer is sending specially- in a primary school by a newly cooled containers 1,800 km upgraded highway no longer down the North−South Corridor arrive covered in dust or mud to Bangkok from Bangkok and exporting the oil to people at either end and on dry data, such Myanmar through Ruili. as traffic flows or customs reports on goods. Besides, in the larger and more complex Small enterprises are also sprouting up. economies that need expressways, roads are At Mohan on the PRC−Lao PDR border, a only one of many factors affecting growth. Chinese entrepreneur has bought a bus and is ferrying passengers between Jinghong But in simpler societies rising from a low and Luang Namtha. In Luang Namtha, a base, it is much easier to discern the impact Lao driver has turned entrepreneur after of a new all-weather road in the villages and buying two mini-vans to service a growing small towns along the way, especially when number of tourists, business people, and it has just replaced a dirt track that was development officials. Also in Luang Namtha, near-impassable in the wet season. a Thai woman has opened a restaurant to cater to the increasing busloads of Thai In such places, a paved road transforms life tourists traveling between Chiang Khong and on so many levels. In Lao PDR, it helps village Jinghong. women take paddy to a mill rather than spend hours pounding the rice at home. It Aside from spawning private sector enables rural folk to sell bamboo shoots and enterprises, the new roads, by reducing wild mushrooms in town, and traders to fetch travel times and easing conditions, are khem (dried grass) or rice from the village. boosting tourism in the face of economic In Cambodia, it allows children to arrive downturn. As well as the continuing at school without being covered in dust in popularity of destinations like Cambodia’s the dry season or mud in the wet. It helps a Wat and Lao PDR’s Luang Prabang, it stone carver bring better quality white stone helps that the PRC’s Yunnan Province and Lao from the and send his statues of PDR’s Namha protected area are among the Buddha all around the country. travel guide Lonely Planet’s top 10 places to visit for 2009. Improved roads are directly In societies with rudimentary health care linked to a 300% surge of Thai visitors to in rural areas, a road can make a difference Jinghong in 2008 and a rising stream of between life and death. One elderly Lao

Impact Stories visitors across the border from Thailand into villager recalls how she lost 11 of her northwest Cambodia. 14 children in the days when doctors and nurses were simply unavailable. Now a It’s not permissible to stop on the PRC hospital is a 20-minute ride away. Clearly, expressways that float above the countryside such access helps to bring down rates of on concrete columns or burrow through infant—and maternal—mortality. At Luang mountains, so one has to fall back on meeting Namtha, a doctor at a provincial hospital says 2

• In Thailand, an entrepreneur is manufacturing alternators in Phitsanulok and exporting them to GMS neighbors many rural sick can now make it to a medical use among sex workers has risen to 97% in facility in a few hours instead of a few days— 2008 from 17% in 1994, says Dr. Mean Chhi and ambulances can reach isolated areas in Vun, director of the National Center for HIV/ emergencies. AIDS in Phnom Penh. He reports that the prevalence rate among people aged Inevitably, there are drawbacks as well 15 to 49 has dropped from 2% in 1998 to 0.8% as benefits to improved connectivity and in 2008, and may decline to 0.6% by 2012. increased competition. At a border between He does warn, however, that the decline in Lao PDR and Thailand, one Lao tour operator brothels and corresponding rise of karaoke worries that her business might lose out bars and massage parlors can lead to reduced to Thai operators. In turn, Thais wonder condom use as sex workers form more whether Lao will maintain the high charges it regular relationships with clients. currently levies on cars entering the country. The trafficking of people and drugs remains Others fret that increased cross-border a problem at some borders but can be activity tends to result in higher HIV/AIDS reduced by strict enforcement by, and close infection rates or trafficking in women and cooperation between, border authorities. children. However, in Cambodia, where “There are cases of illegal trafficking, but it sexual transmission causes 95% of HIV/AIDS is very small,” says Lieutenant Colonel Khuoy infections, awareness-raising programs, often Kry, head of the immigration police at Bavet, targeted at “hot spot” border areas, have Cambodia’s with southern Viet proved effective. Nam. “There is good cooperation with the Viet Nam authorities to prevent trafficking of As a result of education programs, condom women and children.”

“There are cases of illegal trafficking, but it is very small,...there is good cooperation with the Viet Nam authorities to prevent trafficking of women and children.”

—Lieutenant Colonel Khuoy Kry Head of the Immigration Police at Bavet, Cambodia Profiles of Cross-Border Activity 3

• Lao villagers are building • In Viet Nam, children in better homes as a result of the hill tribes will have a increased trade brought by better diet when a new road a rehabilitated Route 3 improves market access • At the Lao village of Chaleunsouk, a newly- rehabilitated road has brought these children within a 20-minute ride to hospital Impact Stories

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It is hard to dispute that roads help key aim of the GMS Program is to develop to spur growth, or temper a downturn. linkages between improved infrastructure In northern Lao PDR, the government and pro-poor activities. reports that many investments have shifted from mainly agribusiness to trading and The private sector shows how this can be service enterprises since the upgrading done, especially in the tourism sector. of Route 3. One bank in Luang Namtha As stories in this publication show, is forecasting a 50% growth in lending ethnic groups in Lao PDR and Viet Nam for 2009—perhaps one of the few banks are increasing their incomes in ecotourism in today’s world with such an optimistic or home-stay activities. In Cambodia, outlook. many underprivileged youth are training as traditional weavers and carvers, while Less clear is whether connectivity will others are developing skills at hotel and benefit the better-off, like traders and restaurant schools. These are small steps, tourists, while marginalizing the poor. One but they offer hope. • From Jinghong, this trader is importing oil from Thailand along the North−South Corridor and exporting much of it to Myanmar

• In Viet Nam, hill tribe

handicraft makers expect Profiles of Cross-Border Activity more tourists when a northern expressway is constructed 5

It is 17 years since the GMS Initiative—to In the words of one ADB country director, promote economic cooperation among the “GMS is now a lively teenager. It has physical six countries sharing the Mekong River—was strength (infrastructure) but, like a teenager, established, after being conceived by the faces challenges as it grows into a healthy Asian Development Bank (ADB). adult.”

In the past few years, GMS road maps have As GMS approaches its coming-of-age, it will exploded with new lines showing the rapid focus more on the “soft” side of integration. development of economic corridors linking It will move from transport to trade, and look its members. Much remains to be built, but at, for example, how education standards the foundations are largely there. One of the and polices can be better harmonized or how most important next steps is to implement environment and biodiversity can be better the cross-border transport agreement that managed on a cross-border basis.  harmonizes procedures and facilities to further ease the flow of people and goods. North−South Economic Corridor Guangxi Gateway to the South Goods are flowing from the People’s Republic of China’s Central and Eastern Provinces through Guangxi Impact Stories

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• Tollway at the start of the Nanning−Youyiguan expressway: Greatly reduced travel times for regional traffic Guilin

Kunming ingxiang, Guangxi Zhuang Autonomous Region: Baise GUANGXIZHUANG At Pingxiang, on Guangxi’s border with Viet Nam, Yuxi AUTONOMOUS REGION Zeng Zhenhui says it took 10 hours to haul his PEOPLE’S REPUBLIC OF CHINA cargo of oranges from Guangdong Province. Gejiu Yulin Nanning P He has been going back and forth on this route for Pu’er Youyiguan Pingxiang Qinzhou Lao Cai HuuNghi 5 years and has seen big changes in that time. A few Fangcheng Lang Son Dongxing years ago, he would have used a narrow, pot-holed YenBai Mong Cai road from the Guangxi capital of Nanning to the border. Kep Now he travels far more quickly on a 138-kilometer Mohan HA NOI Boten HaiPhong (km) expressway, built with assistance from the Asian HoaBinh Luang Namtha Development Bank (ADB), which opened 3 years ago. Ninh Binh GulfofTonkin Thanh Hoa Zeng is waiting with others in a big parking area Luang Prabang for his papers to be processed in a modern logistics center. Now that computers are used, this procedure Vangvieng Vinh also has become significantly less time-consuming.

Ban Lao VIENTIANE The 1,000 truck capacity car park and E-customs Nong Khai facility represent part of the logistics center’s first Loei Nakhon Phanom Thakhek stage of development, says Wei Hao, deputy head of Guangxi Wantong International Logistics Company, which has run the center since it opened in 2006. Work will start this year on building the 1.6 billion yuan ($235 million) second stage which includes unloading/reloading facilities and warehouses, and a training center. Nearby, the government is developing a free trade zone. Gateway to the South

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“We built the expressway— in addition to the national highway—because it is for regional traffic, with limited access and higher speeds.”

—Zhang Xuelian Deputy Chief in the Guangxi Communications Department People’s Republic of China • Guangxi’s geologically unusual karst mountains stretch all the way to Viet Nam: Guilin, north of Nanning, is the big tourist drawcard

• Dolorting eui te doloreros doluptate eum nibh exerit eratis etue esecte el ipit aciliquis doluptat.

Impact Stories In the larger picture, Guangxi will expand its gateway role with regional rail and sea links as well.

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Since joining the Greater Mekong Subregion Guangxi is a mountainous province noted for (GMS) Program in late 2004, Guangxi has its unusual karst rock formations—for which made rapid progress in its goal to become an Guilin in the north is famous—and Nanning, efficient gateway for central and eastern the capital, is a cultural, educational, and People’s Republic of China (PRC) to Southeast transport hub. Tourism is a big driver of Asia. It completed the 138-km Nanning– Guangxi’s economy. Youyiguan expressway 3 years ago and the Pingxiang−Lang Son border point is part of “We built the expressway in addition to the the GMS cross-border transport agreement. national highway because it is for regional traffic, with limited access and higher Since the expressway opened, total traffic speeds,” says Zhang. The national road now volume rose 24% to 5.1 million in 2007 serves villages and towns between Nanning and 18% million to 6.2 million in 2008, and the border. says Zhang Xuelian, a deputy chief in the Guangxi Communications Department. Although traffic moves at higher speed along the expressway, it has one fifth of the • Zhang Xuelian, a deputy head in Guangxi’s Department of Communications at Friendship Gate: Traffic volume grew 18% along the expressway in 2008

• Collecting a toll fee on the Nanning−Youyiguan expressway: Built for regional traffic between the PRC and Southeast Asia

• Processing is done through computers at the Pingxiang logistics center: It will be faster once a cross-border transport agreement is implemented

national road’s accident rate and a quarter Darussalam, Cambodia, Indonesia, Malaysia, of the fatality rate, says Chen Meizhen, the Philippines, Singapore, Thailand, and deputy chief of the expressway operator, Viet Nam. Guangxi Southern Expressway Co., Ltd. “This is because of the barrier separating Two structures, one modern and the other incoming and outgoing traffic and the lack ancient, capture the PRC’s efforts to foster Gateway to the South of intersections compared to the national closer ties with its neighbors. One is a large 9 road, which goes through towns,” he says. China−ASEAN (Association of Southeast Asian Nations) Expo hall in Nanning, built In the larger picture, Guangxi will expand 5 years ago and now the site of a major its gateway role by developing regional rail intraregional trade fair every year. The and sea links as well. It has three major other is the Q’ing dynasty archway at the seaports and is a key member of the Pan- border. Once called the South China Defense Beibu Gulf Economic Cooperation Forum Gate, it has been renamed Friendship Gate that is exploring cooperation between parts as it is now witness to the flow of goods, of southwest and southeast PRC and Brunei not troops. 

Although traffic moves at higher speed along the expressway, there are fewer accidents than on the national highway. • Reloading by the roadside at Huu Nghi: The poster at the back shows the planned modern logistics center Impact Stories

Chuxiong Kunming 10 GUANGXIZHUANG AUTONOMOUS REGION Baise Yuxi PEOPLE’S REPUBLIC OF CHINA Gejiu Yulin Nanning Hekou Pu’er Youyiguan Pingxiang Qinzhou Lao Cai HuuNghi Two expressways from Lang Son YenBai Kep Ha Noi to two border towns, HA NOI HaiPhong Lao Cai and Lang Son, will spur HoaBinh Ninh Binh intraregional trade

Thanh Hoa Luang Prabang

Vangvieng Vinh Pakkading

a North−South Economic Corridor North Viet Nam

New Dawn in New Dawn in Highlands Highlands 11 a Noi, Viet Nam: Forming a rough bring more income, better diet, and access V-shape on the map—with the to social services to many of Viet Nam’s capital of at the base—two isolated communities. ADB-supported expressway projects Hwill stretch out like giant pincers to the The 130-kilometer (km) northeast arm, for border of the PRC in the northeast and which feasibility studies will begin this year, northwest. will link Ha Noi with Lang Son, at the border of the PRC’s Guangxi Zhuang Autonomous They are among key economic corridors Region, which joined the GMS program that will bring members of the Greater 5 years ago. The 260-km northwest arm, Mekong Subregion (GMS) program closer which ADB is financing with loans totaling by facilitating trade, tourism, and $1.1 billion, will join the capital with Lao Cai other linkages. While climbing through at the border of the PRC’s Yunnan Province. mountainous terrain, the highways will also Construction is due to begin in 2009. • Agent Ha Ngoc Diep coordinates the transfer and delivery of foods at Lang Son

Despite the downturn, Yunnan is forging ahead with a huge expansion of facilities at the border with Viet Nam. Impact The northern Vietnamese highways will At Huu Nghi, on the border with Guangxi meet Chinese expressways that link up with Province, the constraints are still in

Stories Guangxi’s capital of Nanning and Yunnan’s evidence. In a gravel yard, laborers are capital of Kunming—and way beyond. The offloading imported goods from Chinese highway to Lao Cai, for example, will reduce trucks and reloading them onto Vietnamese the time trucks take to travel between trucks. Until the CBTA is effective, allowing 12 Kunming and Ha Noi from 3 days to one. for faster processing and for some vehicles to cross borders, this area is a bottleneck. The roads help cement an era of peace and prosperity in a region that had been torn by “Goods can stay here between one and conflict only decades ago. 3 days, depending on how well the documents are prepared, how heavy the “There has been growing recognition by the goods are, and where they are going,” authorities that the relationship with the says Ha Ngoc Diep, a woman agent who PRC is now very positive and presents an coordinates deliveries with a cooperative opportunity to develop northern Viet Nam of Vietnamese drivers. very quickly,” says Ayumi Konishi, ADB’s country director for Viet Nam. Despite such delays, the completion of a 200-km expressway, also assisted by ADB, Along with physical infrastructure, an on the PRC side from Nanning to the border ADB-brokered cross-border transport has helped boost trade. In value terms, agreement (CBTA) to harmonize customs, trade between Guangxi and the region that immigration, and quarantine procedures includes Lang Son Province, Ha Noi, and Hai has been signed by all members, but is still Phong jumped from $1 billion in 2007 to awaiting implementation. $1.5 billion in 2008, says Duong Van Chieu, • Vendors at a Lang Son market: Oranges are among the many imports from the PRC

• A Vietnamese trader in Hekou: Has lived in the PRC since vice director of the Lang Son Planning and 1979 but crosses the border to Investment Department near the border. replenish her stock every few days Although the downturn is slowing the import of goods like machinery, it hasn’t had much impact on agricultural products, says Duong. Chinese trucks bring temperate weather produce like apples, pears, and spring onions and return with tropical fruit, like watermelons and lychees.

Duong reckons that the turnover of trade through this gateway will reach $5 billion by Leapfrogging to New Dawn Mobile Telephony in Highlands 2015 and $10 billion by 2020. 13

On the northwest frontier, between Viet Nam’s Lao Cai and the PRC’s Hekou, trade facilities are well established, as Yunnan Chang Yun-seok, manager of was a founding member of the GMS Initiative • a Korean aluminum bar maker in 1992. On the PRC side of the Red River, at an industrial park outside workers are busy transferring oranges and Ha Noi: Plans to export to ginger from Chinese to Vietnamese trucks. neighboring countries

Nearby is an open air market where traders set up stalls daily and do business until their goods are sold. A short walk away is a permanent, covered Vietnamese dry goods market. Wholesalers—and consumers—come here from all over Yunnan to buy Vietnamese exports ranging from rubber footwear to ceremonial swords and bracelets. One Vietnamese trader says she has been based in the PRC since 1979 and crosses the border every few days to replenish stock. Her big seller is an all-in-one coffee, cream, and sugar package.

At this border, the volume of imports and exports reached $1.1 billion in 2007 but tumbled to $0.66 billion in 2008, says Deng Yongji, director of Hekou’s Bureau of Commerce. The slowdown may be eased in 2009 by the opening of the last section of an expressway linking Hekou with the Yunnan capital of Kunming.

Despite the downturn, Yunnan is forging ahead with a huge expansion of border facilities. The current administration buildings will be dedicated to passenger movement, while cargo traffic will be shifted to another area where a second bridge over the Red River is due for completion in 2009, and the ground has been cleared for a huge PRC−Viet Nam logistics center. • Loading ginger into Vietnamese green bags at Hekou: This facility offers a Currently, 70% of the cross-border trade one-stop service, handling originates from the PRC, says Huang. This trade, customs and quarantine may change as Viet Nam becomes more procedures internationally competitive. A proud and industrious country of 87 million, Viet Nam is catching up quickly after decades lost to Xie Chuang Ping, manager • conflict and a US trade embargo. of a Vietnamese shoe shop in Hekou: Higher prices but better quality One Vietnamese enterprise that is exporting to the PRC, for example, is footware manufacturer Biti’s. The firm makes shoes in and trucks them up to 14 Hekou, where it has a wholesale presence.

“Our shoes are more expensive but of better quality and we can sell 2,000 pairs a week in the summer,” says Xie Chuang Ping, manager of a Biti’s shop in Hekou.

Other fields in which Vietnamese businesses can compete with the PRC include processed seafood and garlic, with small potatoes as another potential export, says Dr. Pham Thi Thu Hang, a director of the Small and Medium Enterprises Promotion Center of Viet Nam’s Chamber of Commerce and Industry in Ha Noi.

Viet Nam’s small and midsize businesses, many of them exporters, make up 90% of the private sector. “Many companies have opened representative offices in Lao Cai after we promoted its potential as “When we talk to foreign investors, they an economic center,” says Pham. always ask about the roads,” says Nguyen Duc Son, a senior official with the Hung Other major drivers of exports will be the Yen Province’s Department of Planning and international enterprises that occupy the Investment that oversees six economic growing number of industrial parks between zones between Ha Noi and Hai Phong, three Ha Noi and the major port of Hai Phong. of which are under construction.

In a Japanese park, Canon has set up a large The importance of Hai Phong port will only manufacturing facility as part of its global increase as a key point in the passage of production chain strategy. The company imports and exports. Recognizing the shape uses GMS roads extensively when bringing of the future, Hai Phong port has taken in components from Thailand, assembles a share in a large logistics center under printers in Ha Noi, and trucks them up construction in Lao Cai that will handle both to the PRC via Nanning. Other Japanese road and rail cargo, says Truong Van Thai, companies are following suit. deputy director general of Hai Phong port.

In another industrial park, a Korean firm With its heavy dependence on exports and chose Viet Nam over the Mideast to locate foreign direct investment, Viet Nam is no its first overseas plant and is exporting exception in feeling the economic downdraft, aluminum bars to Korea, Malaysia, and but improving infrastructure should temper Thailand. “Our products are used in the any slowdown in the north and accelerate construction industry and we are exploring development when better times return.  markets in Viet Nam, as well as Lao PDR and Cambodia,” says manager Chang Yun-seok.

• Vietnamese crossing the bridge at the border between Lao Cai and Hekou: A second border facility is being built New Dawn in Highlands

15 • Bridge at the H’mong village of Lau Chai: A planned expressway will increase access to markets

Impact Stories a Pa, Viet Nam: The Thai tourist pushed, domestic tourism should retain a trekking around hill tribe villages good share,” says Ayumi Konishi, the Asian near Sa Pa was on his fourth visit Development Bank’s (ADB) country director to Viet Nam. “On this trip, we took in Ha Noi. “If GMS countries can make cross- advantageS of the cheap package tours that border travel much easier, if people in Ho have become available since the downturn,” Chi Minh City think of visiting Siem Reap said Sumboon Yingyongkitmongkol, a just as easily as visiting places in Viet Nam, 16 construction project manager, who was this is a chance for intraregional tourism to touring with his wife in January 2009. develop more quickly.”

Sumboon is the kind of Greater Mekong Some indicators suggest this is happening. Subregion (GMS) tourist that Viet Nam and Figures from Viet Nam’s General Statistics its Mekong neighbors are hoping will help Office show that while international arrivals stem the slowing growth in tourist arrivals. fell slightly from countries like France Viet Nam’s international arrivals for 2008 and Japan last year, they rose by around grew less than 1% over 2007 and fell well 10% from the People’s Republic of China, short of the targeted 5 million visitors. Malaysia, Singapore, and Thailand. Visitor arrivals could fall in 2009. Nguyen Dang Thang, who runs a tour “Despite the slowdown, consumption business out of Ha Noi, says most of his grew 30% in Viet Nam in 2008. All the clients for tours to the former French hill GMS countries are talking about stimulus station of Sa Pa are from Mekong countries. packages and if consumption is going to be North−South Economic Corridor North Viet Nam

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Hill Tribes Guilin Dali Hexian o Kunming GUANGXI ZHUANG 24 00'N Longshuanka Hill Tribes on Tourists Rely AUTONOMOUS REGION Wuzhou Mangshi Baise Yuxi 17 YUNNAN Muse PEOPLE’S REPUBLIC OF CHINA Gejiu Yulin Nanning

Rely onSalween (Thanlwin) Hekou Pu’er Youyiguan Pingxiang Qinzhou Lao Cai HuuNghi Fangcheng Jinghong Lang Son YenBai i Mengla Daluo Kep Mohan HA NOI Kengtung Nateuli Boten HaiPhong Tourists HoaBinh Tachilek MaeSai Houayxay Ninh Binh Improved access to marketsChiang Saen Chiang Thanh Hoa means today’s generation hasChiang Rai Khong Luang Prabang Phayao Vangvieng Vinh Mai a wider choice of food Pakkading E Phrae Lampang Nong Khai Denchai Loei Nakhon Phanom Thakhek Uttaradit Udon Thani Dong Ha Hue Mukdahan Khon Kaen Kaysone Phomvihane Da Nang Phitsanulok Kalasin Salavan T HAILAND Dung Quat Chaiyaphum Pakse n Phouvong VIET NAM Dietri Nakhon Ratchasima

QuyNhon Ayutthaya Pleiku Stung Treng Poipet Siem Reap Aranyaprathet CAMBODIA Tourism employs 10% of Viet Nam’s workforce. Among those who depend on visitors are the many ethnic groups who live in the mountains around Sa Pa.

At present, most visitors traveling from Ha Noi to Lao Cai—Sa Pa is a further hour’s drive from Lao Cai—opt to take a night train rather • A girl at a kindergarten in Lao than travel over a pot-holed road for the Cai: Most H’mong prefer to best part of a day. This may change when an stay in the uplands expressway between Ha Noi and Lao Cai— financed by ADB—is completed in 2012.

Co, a H’mong mother with • The H’mong village of Lau Chai—an her baby boy: When she has money, she buys fruit and 8-kilometer trek through rice-terraced vegetables to improve her valleys from Sa Pa—is an example of a children’s diet community that expects to gain from the tourists the expressway will bring as well as better access to Ha Noi.

Most of the independent H’mong—who originally came from the north—want to retain their simple farming and livestock- rearing lifestyle among the mist-covered hills. But they also appreciate the income they earn from selling their cloth products, embroidered in traditional patterns, to visitors.

The 600-strong community, where most live

Impact Stories in wooden and bamboo homes, has seen many changes in recent decades.

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• H’mong store owner Nguyen Duc Thang with customer: Easier access to Ha Noi will enable him to sell more goods “When I was young, I hunted for animals I would go more often,” says Nguyen. in the forest and fished in the river,” says “I would buy clothes like Ho Chi Minh khaki Nguyen Duc Thang, 54, who runs a general uniforms with epaulettes and medallions, store by the footbridge over the river that which sell well here.” runs through the village. “But all that has gone now.” Over the years, slash-and-burn Smoking a bamboo water pipe, he says he agriculture has been greatly reduced and would also buy more tobacco from Hai Phong, opium growing has been replaced by rice. which he prefers over the locally grown product. But improved access to outside markets means today’s generation has a wider choice A woman carrying an infant on her back of food. Children can eat apples and pears, enters the store. Co, who sells handicrafts, for example, that are not grown locally. With says the baby is her first boy after giving assistance from the government and NGOs, birth to several girls. “When I have money, the village has schools and a health clinic. I go to the market in Sa Pa and buy fruit and vegetables food to improve the diet of my Nguyen, who also grows rice and tobacco, children,” she says. “If not, we just have rice says he goes to Ha Noi twice a month to buy and cold water,” she says. replenishments for his store, like candy, beer, soft drinks, and noodles. It takes 2 days to go Although some villagers may find the back and forth on a public bus, which costs a increasing number of tourists intrusive, they fraction of the train fare. “If I could go and are well aware that they also bring benefits. come back the same day on a good road,

“If I could go to Ha Noi and come back the same day, I would replenish my store more often.”

—Nguyen Duc Thang store owner in Sa Pa, Viet Nam Hill Tribes Hill Tribes on Tourists Rely

19 • Hill tribe woman weaving by the side of a road near Sa Pa: Many depend on selling handicrafts to tourists • The bridge across the Mekong at Jinghong: Goods move south from here increasingly by road as well as by river Impact Stories

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Jinghong is a magnet for tourists and land has been cleared for an airport expansion. North−South Economic Corridor Yunnan Business on the Move Entrepreneurs, big and small, take advantage of better connectivity

98o 00'E unming, Yunnan, People’s Republic of China: From Kunming, trucks carrying containers of flowers travel every day along the entire length of theK 1,800-kilometer (km) Greater Mekong Subregion (GMS) North−South Corridor. They pass through Yunnan Province, Lao PDR, and Thailand before arriving in Bangkok some PEOPLE’S REPUBLIC OF CHINA Myitkyina 40 hours later. Dali Chuxiong Kunming At Jinghong, in southern Yunnan, an oil

Longshuanka Business on the Move trader imports several tanker loads of Mangshi Baise Ruili Yuxi gasoline and diesel a month, all hauled by 21 YUNNAN PROVINCE road from Bangkok. Muse Gejiu At Mohan, on Yunnan’s border with Lao PDR, Lashio Salween (Thanlwin) Hekou Pu’er Youyiguana Chinese entrepreneur recently started a Lao Cai Thibaw HuuNghi daily bus service between Luang Namtha in Jinghong Lang Sonnorthern Lao PDR and Jinghong. YenBai Mengla Daluo Kep Mohan Such snapshots of entrepreneurial Kengtung Nateuli Boten activityHaiP show that heavy PRC government Loilem Tachilek Luang Namtha investment—with support from the Asian Houayxay Ninh Binh MaeSai LAO PEOPLE’S Development Bank (ADB)—to provide Chiang Saen Chiang DEMOCRATIC REPUBLIC Hoa highways along the 700 km between YPYIDAW Khong Chiang Rai Luang Prabang Kunming and Mohan are starting to pay off. Vinh Pakkading Within 7 years of building roads under the GMS program, Yunnan has expressways VIENTIANE Ban Lao Phrae covering 90% of the North−South Corridor. Lampang Nong Khai The Jinghong−Mohan section was completed Denchai Loei Nakhon Phanom Thakhek Uttaradit Udon Thani Dong Ha Sukhothai Hue • Kunming is famous for flowers: in early 2008, though it has only two It exports them to Southeast lanes, with the capacity to be doubled. An Asia and the Mideast through the GMS corridor expressway along the 70 km between Mohei and Pu’er will complete the chain in 2010.

An inland province, one of Yunnan’s major objectives has been to carve out access to seaports under the GMS Program, notes Ma Defang, a deputy director of Yunnan’s Communications Department, which is responsible for transport issues.

Aside from having better access to the city- port of Bangkok, Kunming is now joined by highways to Hekou, where it will link up with a planned expressway to Haiphong port in Viet Nam, and to Ruili, that is linked to the Myanmar capital of Yangon.

With its temperate climate, Kunming has flourishing flower and vegetable industries that are using GMS roads to grow exports. One major flower producer offers a case study of the profits—and pitfalls—of using the North−South Corridor. Daily, JF Flowers dispatches a specially-fitted container— designed to preserve flowers like roses, Impact Stories

22

• Vegetables being packed in Kunming: Many will be trucked to ports to be shipped to Southeast Asia lilies, and carnations at low temperatures— But the journey is not without constraints. by truck to Bangkok. From there, flowers While a cross-border transport agreement are flown to Malaysia, Singapore, and the among the PRC, Lao PDR, and Thailand awaits Mideast. For the return trip, the container implementation, Chinese and Thai trucks brings back orchids. cannot enter each other’s territory. So, at the Lao PDR border, the container of flowers Since starting to use the North−South has to be transferred by crane from one Corridor in mid-2008, the company trucked truck to another—a cumbersome process that 1,000 tonnes of flowers in the first is repeated on the return journey. 6 months. It is confident of more than doubling this volume through 2009, despite Another hazard is that of informal payments. the downturn, says logistics director “It’s tricky handling a delicate product like Huo Lankun. flowers, but the biggest risk is in dealing

“I will definitely consider sending more products to Southeast Asia through the North−South Corridor, especially if it becomes easier and quicker with time.”

—Mark He Marketing Director for Kunming Chennong Green Products Business on the Move

23

• Huo Lankun watches flowers being packed at Kunming: His firm sends a truck daily down the 1,800 kilometers North−South Corridor to Bangkok • Dai head man Ai Jiao with his family: May re-open a resort to attract visitors

with border officials,” says Huo. “In the PRC businessperson licensed to import gasoline and Thailand, they do their job properly, but and diesel from Bangkok—but one condition is others require unofficial payments. If we that he uses the North−South Corridor. don’t pay and the containers are opened, the

Impact Stories flowers can be damaged.” Owner of 10 petroleum tank trucks, or 7% of the 150 fuel trucks regularly using the Other causes of delay, says Huo, are queues North−South Corridor, he was bringing in and paperwork, closures by the ferry service between 10−20 tanker loads a month in 2008, between Lao PDR and Thailand, and work although demand has dropped recently. Liu stoppages during public holidays. exports most of the oil to Myanmar through Ruili. The trip from Bangkok takes 16−17 hours 24 In the yard of a major Kunming vegetable despite the hassle of having to change tankers producer, a container truck is about to pull at the border. Clearly, he will gain once cross out. Chen Jun, one of a pair of drivers, border processing is made easier and faster. says it will take 20 hours to reach the port of Guanlei, where the vegetables will be With its balmy weather, Jinghong is a magnet shipped to Bangkok. for tourists and land has already been cleared for an airport expansion to handle Mark He, marketing director for Kunming more arrivals. Thai visitors rose 300% in 2008, Chennong Green Products, says they also especially after the completed upgrading truck vegetables, like snow peas and of roads in Lao PDR and between Jinghong broccoli, through Shenzhen for shipping to and Mohan, says Zeng Chaohua, deputy Malaysia and Singapore. “I will definitely general manager of Banna branch of Yunnan consider sending more products to Southeast International Travel Agency. Asia through the North−South Corridor, especially if it becomes easier and quicker The number of Chinese tour groups he sends with time,” he says. to Lao PDR has also more than doubled from 1−2 a month to 4−5 a month, he says. Most In Jinghong, capital of tropical from the PRC head for Luang Prabang, and Xishuangbanna, Liu Tianwei is the first Yunnan many go on to visit Thailand. • At the Mohan border, Xiong Huocheng stands in front of the bus he bought recently: It ferries passengers between Luang Namtha and Jinghong

Not everyone is benefiting from the rise in visitors. In the Dai village of Manluandian near Jinghong, head man Ai Jiao says they get few visitors since a resort in the village was closed a few years ago. The village needs people to buy its woven handicrafts and Jiao says they may reopen a resort to draw the tour buses.

In the border town of Mohan, Xiong Huocheng is standing beside the bus he bought 2 months Business on the move earlier for over 300,000 yuan ($43,860). He 25 chats with passengers and accepts a request from a couple to deliver a crate of wine to Jinghong.

“Since road got better on both sides of the border last year, I saw an opportunity,” he says. He charges 70 yuan ($10) for a trip between Luang Namtha and Jinghong, and says his fuel cost is 200 yuan ($29). On average, passengers occupy only a third of the bus’s 30 seats but it is enough to break even. He is confident that demand will grow and may expand his bus route to Houayxay when a planned bridge is completed.

Indeed, the North−South Corridor can expect • A Dai weaver at Manluandian to see a proliferation of entrepreneurs, big near Jinghong: Needs more and small, in the years ahead.  people to buy handicrafts Impact Stories

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• A paved road and a satellite dish: Sign of increased connectivity in villages like Thin Thok

Lao PDR is not just benefiting as a transit stop, but also attracting more visitors and investments in its own right. North−South Economic Corridor Lao PDR

o 98 00'E Opening Up108o 00'E a

Tranquil LandGuilin

Dali Hexian o Chuxiong Kunming A newly-upgraded highway24 00'N is Longshuanka Wuzhou increasingBaise GUANGX tradeIZHUANG and tourism, Ruili Yuxi AUTONOMOUS REGION

PEOPLE’S REPUBLIC OF CHINA encouraging investments, Opening Up a Land Tranquil Muse YUNNAN PROVINCE Gejiu Yulin and raisingNanning living standards. 27 Salween (Thanlwin) Hekou Pu’er Youyiguan Pingxiang Qinzhou Lao Cai HuuNSomeghi worry it may also accelerate Fangcheng Jinghong Lang Son Dongxing YenBai change inMong a Cai fragile culture. Mengla Daluo Kep Mohan Kengtung Nateuli Boten HauangiPhong Namtha, Lao PDR: The People’s Tachilek Luang Namtha Houayxay Ninh BinhRepublic of China (PRC) and Lao PDR MaeSai LAO PEOPLE’S GulfofTonkin meet at the frontier, but their border Chiang Saen Chiang DEMOCRATIC REPUBLIC a AW towns show they are worlds apart. Chiang Rai Khong Luang Prabang L Phayao Vangvieng OnVinh the PRC side, Mohan is a small town Chiang Mai Pakkading with a neat main street of concrete shop Lampang VIENTIANE houses and residential buildings—and is set Phrae Ban Lao for explosive growth. Much of the ground Nong Khai has been cleared for the construction of Denchai Loei Nakhon Phanom Thakhek Uttaradit Udon Thani industrial and serviceDong Ha parks, logistics and administrative centers,Hue a golf course, luxury Tak Kaysone Phomvihane Da Nang Phitsanulok Mae-Sot Kalasin Salavan Kamphaeng T HAILAND Dung Quat Phet Chaiyaphum Pakse Nakhon Sawan Phouvong VIET NAM villas, and hotels. The population will more world. Satellite dishes appear between than triple to 20,000 in the next 5 years, thatched roofs. Since last year, too, a estimates Ma Zhenguo, a senior official with potholed track has been replaced by a the Mohan Economic Development Area. surfaced national Route 3 that runs through the village. This means more trucks and In contrast with its giant neighbor’s rapid buses disturb the rural tranquility. But it urbanization, Lao PDR’s tiny population of also brings traders more frequently to buy 5.8 million lives mostly in isolated, but bundles of khem, the long grass used to make closely-knit, communities in mountainous brooms, earning extra income for a village areas. Inside the Lao border, the village of that had a disappointing harvest in 2008. Boten has shrunk, as most inhabitants have moved to the interior, and the first major Significantly, the improved Highway 3, which development is, in fact, a Chinese complex traverses northern Lao PDR between Boten of a large hotel, shops, and apartment blocks. and Houayxay on the Mekong River bordering Thailand, was jointly financed by the PRC Not far inside the border is the village of and Thailand, and supported by a $30 million Thin Thok, which presents a timeless rustic loan from the Asian Development Bank scene at sunset. Children play and chickens (ADB). roam among the stilts supporting simple wooden huts. A group of sarong-clad women The 228-kilometer (km) road is an important bathe in a small fenced enclosure. Men squat link in the 1,800-km GMS North−South on tiny wooden stools, while women cook Corridor between Kunming and Bangkok, and over small fires. is already helping to increase tourism and trade between the PRC and Thailand and There are also signs, however, that the other parts of Southeast Asia. village—home to Khmu and Punoy ethnic groups as well as Lao Lum (lowland Lao)— As the tiny country in the middle, Lao PDR is increasingly connected to the modern is not just reaping benefits as a transit Impact Stories

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• Weaver in Thong Chai Tai: Preserving traditional skills stop, but is attracting more visitors and in 2008 and a Chinese group is expected to investments in its own right. finish a fourth in 2009.

In the provincial capital of Luang Namtha, The local branch of state-owned Banque pour visitor arrivals rose by 88,000 to over 184,000 le Commerce Exterieur Lao (BCEL) saw loans in 2008, compared to usual yearly increases leap 150% to 20 billion kip ($2.3 million) in of 9,000 to 10,000, says Alinda Phengsawat, 2008, says deputy director Vattana Xayavong provincial head of planning and cooperation in recently refurbished premises. He projects for the Lao National Tourism Administration. a 50% lending rise in 2009 to meet demand from mainly construction and trading She attributes this to growing infrastructural enterprises, as well as loans for a growing facilities—the advent of electricity a few number of people buying motorbikes to use years ago, more hotels and guesthouses, and on the all-weather road. now a sealed road.

Encouragingly, an increasing share of visitors is staying awhile, rather than passing through, says Phengsawat. Apart from Around Houayxay, Thai tourists and Chinese traders, a large proportion of visitors include ecotourists investments are shifting from Europe and the United States, Japan, and Singapore. Most are drawn to trekking, from being mostly biking, and rafting activities in the Namha protected area. agriculture-related to There are other signs that Luang Namtha is include trading and growing, albeit from a low base. The town of some 40,000 people added a third hotel services enterprises.

• Motorcycles loans are up: The all-weather road spurs demand Opening Up a Land Tranquil

29 • Khorla Philavanh, head man of Chaleunsouk: Villagers sell wild mushrooms and bamboo shoots in town

One budding entrepreneur is Deth Xayachack. comes from villagers building new houses. With savings from a long stint as a driver, “They are using better materials these days, Xayachack bought his first mini-van in 1995 concrete piles and corrugated iron roofs, to and a second in 2005. Business is good, he make stronger houses that last much longer,” says, as the vehicles are rented out about he notes. He also says the village’s primary

Impact Stories 20 days in a month. “The new road is bringing school used to be near the road, but was more tourists and business people, as well as shifted to improved premises on a hill to people working on projects,” he says. reduce the risk of accidents.

Rural communities are also seeing On the western side of the highway, around improvements. At the village of Chaleunsouk, Houayxay, investments are shifting from a 20-minute ride from Luang Namtha, Kway being predominantly agriculture-related to 30 On is standing by the road, waiting to take include trading and services enterprises, sacks of paddy to a nearby mill. “This is partly as a result of the road, say planning saving me a lot of time,” she says. “Before and investment department officials of Bokeo the road was fixed, we would have to pound province. the rice ourselves.” Two big tourism investments include an Sitting on a log, head man Klorla Philavanh $86 million Chinese-financed resort at says that, when the village was isolated Ton Pueng, upriver from Houayxay, and a by a road that was impassable in the wet $42 million Korean complex near the planned season, families lived on a subsistence new Mekong bridge, says Chomepheng basis. “Now the road has made access easy, Vilaysane, head of the investment promotion villagers go to town to sell forest products section. Other investments are in the like wild mushrooms and bamboo shoots, and extraction industry, including gold and traders from town come here to buy rice and precious stones. livestock.” The Mekong bridge, another PRC−Thai joint He says the village, with a population of 359, venture, will significantly boost the economy had no motorcycles before the road, but when it is completed after 2012, says now has around 10. The sound of hammering Vannasone Phothipanya, head of planning. • Building a new home in Chaleunsok: Better materials last longer

Although literacy rates and school enrolments Others fret that, while heading into the have improved, Lao PDR still faces an acute modern world, the country may lose much of skills shortage in tourism and other sectors its unique culture. that the government is seeking to address with vocational training programs. To counter this, one enterprise has organized over 300 women in the village of Thong Chai Even so, there are concerns that the country Tai, near Luang Namtha, into making high- is not yet prepared for the integration that value products for export. “As people rapidly-growing connectivity brings. move into factories and offices, they will lose their traditional weaving skills,” says “Our country is at a relatively low level of Yukiko Tani, a Japanese woman who has development and many are not ready for rapid turned a development project into a private Opening Up a Land Tranquil change,” says Heuan Chanphana, deputy head enterprise. “This business enables villagers to 31 GMS coordinator for the Lao government. As retain their craftsmanship and earn income.” an example, he cites foreign businesspeople who encourage Lao farmers to grow rubber for Learning how to balance progress with cash. “Since rubber causes soil erosion, it is tradition may be one of the country’s biggest unsuitable for growing on hillsides, but some challenges.  local farmers are unaware of this and need to learn from the experience of neighboring countries,” he says.

“Our country is at a relatively low level of development and many are not ready for rapid change.”

—Heuan Chanphana Deputy Head GMS Coordinator, Lao People’s Democratic Republic • Dr. Heuay at a district hospital: With the improved road, patients can be treated and return home the same day, saving considerable costs Impact Stories

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“If we had the hospital nearby when I was young, many of my children would still be alive.”

—Khay Ngern

•Facin vullamcommy nonullam, se ectem zzrit lamet ad ent et lummy nullam zzrit prat. Magna facil iliquis nit velit la North−South Economic Corridor Lao PDR

o 98 00'E Better access108o 00'E to

Guilin

Dali Hexian Health Careo Chuxiong Kunming 24 00'N Longshuanka Wuzhou LikeBaise Khay,GUANGX most ofIZ HUANGLao PDR live in hamlets Ruili Yuxi AUTONOMOUS REGION PEOPLE’S REPUBLIC OF CHINA in isolated mountain areas. Although infant Muse mortality rates have improved markedly in YUNNAN PROVINCE Gejiu Yulin recent years, they are still high. In 2005, Nanning Salween (Thanlwin) Hekou one in 10 children died before the age of 5. Pingxiang Qinzhou Pu’er YouyiguanMothers—four out of five give birth at home Lao Cai HuuNghi without a midwife—alsoFangcheng face high risks. They Jinghong Lang Son Dongxing YenBai die at the rateMong of Cai 405 per 100,000 births. Mengla Daluo Kep Mohan A growing number of village clinics—like Kengtung Nateuli Boten HaiPhong the one at Chaleunsouk village, where Khay Tachilek Luang Namtha Houayxay Ninh Binh MaeSai LAO PEOPLE’S lives—will improveGulfofT onkibasicn health care for mothers and children, as will plans to train Chiang SaenChiang DEMOCRATIC REPUBLIC a AW Chiang Rai Khong Luang Prabang more midwives.

Phayao Vangvieng Vinh Chiang Mai What also helps is the newly-paved Highway 3 Pakkading that runs through the village and has brought Lampang VIENTIANE the hospital in the provincial capital of Luang Phrae Ban Lao Better Access to Health Care Nong Khai Namtha within 20 minutes’ reach, no matter Denchai Loei Nakhon Phanom Thakhekwhat the weather. Until last year, this road— 33 Uttaradit Udon Thani like 60% of the country’s roads—was closed Dong Ha Hue Tak during much of the wet season. Kaysone Phomvihane Da Nang Phitsanulok Mae-Sot Kalasin “If we hadSalavan the hospital nearby when I was Kamphaeng T HAILAND Dung Quat Phet young, many of my children would still be Chaiyaphum Pakse Nakhon Sawan haleunsouk Village, Lao PDR: Khay alive,” saysPhouvong Khay. VIET NAM Ngern isn’t sure how old she is—her birthday wasn’t recorded—but she Dr. Ounheuane Phoutsavath, deputy director reckons she is in her 70s. One figure of Luang Namtha provincial hospital, agrees. sheC knows well, though: she gave birth to “People are healthier now as they can get 14 children, but lost 11 of them before they here much more easily because of the road. were 2 years old. When it was a dirt track, villagers who were ill had to walk for 3 or 4 days—and many gave “I never knew why they died,” she says, up and returned home,” he says. telling her story on a chilly winter morning by a small fire outside her hillside home perched Delays caused by bad roads take a toll not on stilts. “We had no doctors or nurses in just on health but also on finances in a land those days.” where per capita annual income is not much • Dr. Ounheuane Phoutsavath (left): Pregnant women lost more blood when the road was a muddy track

over $600. As an example, he cites a pregnant shortage of qualified medical staff, Luang woman who might be hemorrhaging—“the Namtha cannot treat serious ailments—such longer it takes for her to get to hospital, the as heart and cancer cases—and refers them more blood she will need and the longer she to the capital of Vientiane. This means either will have to stay in hospital.” an expensive plane trip for patients or a 20-

Impact Stories hour journey by road. Another advantage of the improved road is that it allows the hospital’s sole At the Vieng Phoukha district hospital, ambulance to fetch people from rural areas 60 kilometers from Luang Namtha, in emergencies, as well as transport some Heuay Somvang, director of the public health of them home, says Dr. Ounheuane. “It also section, shows another saving provided by helps when we send nurses out to the village better transport conditions. 34 clinics to give training in basic health care.” As she examines a patient with a hand injury Despite progress in health care in recent from a work accident, several members of years, says the administrator, there is much the man’s family wait outside, cooking on an room for improvement. With an acute open fire. It is customary for family members

“People are healthier now as they can get here much more easily because of the road. When it was a dirt track, villagers who were ill had to walk for 3 or 4 days—and many gave up and returned home.”

—Dr. Ounheuane Phoutsavath Deputy Director of Luang Namtha provincial hospital • Father and child in Chaleunsouk: Hospital care is now a short ride away

• A family waits outside a patient’s room at Vieng to accompany in-patients and sleep on the Phoukha district hospital: floor. With the improved road, patients can Quicker access and treatment be treated and return home the same day, reduces this custom she notes, saving considerable costs for the family.

Dr. Heuay says most pregnant Lao women are “shy” and still prefer to give birth at home. She is referring to those who rely heavily on traditional doctors and treatments.

The improved road does have its downside, Better Access to Health Care says Dr. Ounheuane. Most Lao ride motorbikes 35 and bicycles, and higher traffic speeds has brought more risk. Road accident cases treated at the hospital rose from 244 in 2005 to 608 in 2007. Significantly, however, the number dropped to 416 in 2008, which Dr. Ounheuane says could be due to a new regulation mandating the use of protective helmets.

Increased cross-border activity can cause other undesirable trends, says the doctor. Hypertension and diabetes are on the rise, he says, perhaps due to increased imports of soft drinks and food with high sugar content. He also notes that HIV/AIDS cases testing positive at the hospital rose from 14 in 2006 to 27 in 2007 and reckons increased cross- border traffic might be a cause.  North−South Economic Corridor Thailand Visitors head north Crossing the Mekong Impact Stories

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• Passengers and cargo cross the Mekong between Chiang Khong and Houayxay: A new bridge will speed up travel

Visas on arrival and newly improved roads have boosted tourist arrivals in Yunnan Province, and more trade will follow, especially when constraints are eased and a new bridge is completed Ruili mu Yuxi AUTONOMOUS REGION YUNNAN PROVINCE Muse PEOPLE’S REPUBLIC OF CHINA Gejiu Yulin Nanning

Lashio Salween (Thanlwin) Hekou Pu’er Youyiguan Pingxiang Qinzhou Lao Cai HuuNghi Thibaw Fangcheng Jinghong Lang Son Dongxing YenBai Mong Cai Mandalay Mengla Daluo Kep Mohan HA NOI Kengtung Nateuli Boten HaiPhong HoaBinh Loilem Tachilek Luang Namtha Houayxay Ninh Binh MaeSai LAO PEOPLE’S GulfofTonkin MYANMAR Chiang Saen ChiangDEMOCRATIC REPUBLIC Thanh Hoa NAYPYIDAW Khong hiang Khong, Thailand: A middle- Chiang Rai Luang Prabang aged Thai woman clambers out of Phayao Vangvieng Vinh the long-tail ferry boat at Chiang Pakkading

Khong and walks upA the hill to join y Lampang VIENTIANE e a Ctour bus. She is one of a largey group that Phrae a w Nong Khai has crossed the Mekong Rivera from Houayxay d Denchai Loei Thakhek in the Lao People’s Democraticy Republic Uttaradit Udon Thani Dong Ha (Lao PDR) after a trip to the People’s Sukhothai Hue n Tak Republic of China (PRC). Khon Kaen Kaysone Phomvihane Da Nang Phitsanulok head north Visitors Crossing the Mekong Yangon Mae-Sot Kalasin Salavan One tour operator in this northern MawlamyineThai port, Kamphaeng T HAILAND 37 Dung Quat Phet Surasak Dejmee, says the number of Thais Gulfof Nakhon Sawan Chaiyaphum Pakse taking tours from Chiang Khong to Jinghong Martaban Phouvong VIET NAM Dietri in the PRC’s Yunnan Province soared 300% inYe Nakhon Ratchasima 2008 despite the economic slowdown. “Thais QuyNhon used to go Luang Prabang, but now they want Ayutthaya Pleiku a new destination,” he says. “It’s also easierDawei Stung Treng A NDAMANSEA BANGKOK Poipet now as the roads have improved and tour Aranyaprathet groups can get a visa on arrival at the Lao Chonburi CAMBODIA PDR border with the PRC.” TonleSap Da Lat Trat Kampong Cham Other indicators support this trend. In Luang entrepreneur.Myeik “TheSattahip buses from Houayxay Namtha, northern capital of Lao PDR where stop here for an early lunch.” GulfofThailand KohKong visitors pause on the way to the PRC, a Prachuap Khiri Khan MocBai busload of Thais is eating at a Thai restaurant In the largest jade shop in Jinghong, manager PHNOM PENH Bavet Ho ChiMinh City run by Prapa Panicharat, from Ratchaburi Lu Yi De has seen a big increase in Thai Province. “I saw an opportunity with the visitors during the past year. “They come improved road and opened my restaurant mainly for sightseeing, and some ask about in February10o last year,” says the Thai business opportunities,” he says. The sharp increase has been spurred by improved access, including the 2008 completion of the upgraded national Route 3 that traverses northwest Lao PDR between Thailand and the PRC.

The all-weather road replaces a narrow, gravel track that used to be closed for much of the wet season. The project, jointly financed by the PRC, Thailand, and the Asian Development Bank (ADB), has greatly reduced travel time along the 228-kilometer (km) between Lao PDR’s border towns between Boten and Houayxay.

The PRC and Thailand financed the Lao PDR road because it is an important link in the 1,800-km Greater Mekong Subregion (GMS) North−South Corridor between Kunming and Bangkok that will boost tourism and trade between the PRC and Southeast Asia.

In turn, Thailand can also expect to see • Thai tour operator Surasak an influx of Chinese tourists, though this Dejmee: Yunnan Province will come later, says Pattana Sittisombat, is the new destination

• Tourists in Chiang Rai: An influx from the People’s Republic of China is expected Impact Stories

38 chairman of the chamber of commerce in Thai tourists pay $1.50 to cross from Chiang Chiang Rai, the nearest sizeable town inland Khong to Houayxay—the ferry crossings from Chiang Khong. are controlled by a Thai operator—and catch a Lao tour bus on the other side. For “It’s not yet as easy for Chinese as Thais to trucks and cars, the costs are considerably get passports and visas, but I have associates higher—and this doesn’t include informal fees in the tourism industry in Yunnan who plan at customs and immigration. But a major to send tourists down to Thailand,” he says. drawback facing truckers is that they have to “This is just a beginning.” unload their goods onto other trucks—Lao or Chinese—for onward travel. No doubt, Thailand’s political woes in 2008 also contributed to the fact that tourist Such constraints will be alleviated when arrivals from the PRC totaled 600,000 last a bridge across the river—construction is year, only half of Thailand’s target. scheduled to begin in 2009—is completed around 2012. Meanwhile, a GMS cross-border While tourism—one way, at least—is booming, transport agreement (CBTA) that allows trade along the road is expected to grow trucks to transit without unloading/reloading at a slower pace. The reasons are that it is has been agreed upon but awaits ratification still much easier for tourists rather than the and implementation. truckers to cross the border, and that many traders still prefer to transport their goods Currently, tourist groups entering the Lao along the Mekong River. PDR board a local tour bus. But Saengkham

“It’s not yet as easy for Chinese as Thais to get passports and visas, but I have associates in the tourism industry in Yunnan who plan to send tourists down to Thailand... This is just a beginning.”

—Pattana Sittisombat Chairman of the Chamber of Commerce, Chiang Rai Visitors head north Visitors Crossing the Mekong

39 • Thai artist Chalermchai Kositpipat in front of his Rong Khun temple: “Sad to see decline in traditional spiritual values.” • Prapa Panicharat has opened a Thai restaurant in Luang Namtha: Catering to busloads of tourists

Entrepreneurs are exploring cross-border links in “soft areas” like training and cultural exchange. Impact Stories

Inthasane, an accountant with a Lao tour Another reason why trade may grow at a operator, fears that, once the bridge is slower pace along the road than tourism is ready, Thai buses will roll across and leave that the river remains the more attractive Lao operators stranded. For their part, Thai mode of transport for many traders. This operator Dejmee says that Lao authorities is clearly the case at Chiang Saen, upriver 40 charge 7,000 baht ($200) for a car to enter from Chiang Khong and the first port of call and wonders aloud if such high fees will still for Chinese vessels sailing from Jinghong. be charged when the bridge is open. At a market stall on the riverbank, Sukanya Under the CBTA—brokered by ADB—the Antideh stands behind a colorful array compromise solution is to allow 500 vehicles of fruit and vegetables—pears, oranges, from each GMS country to cross borders pomegranates, mushrooms, and medicinal and operate in neighboring countries, plants—that have newly arrived from the notes Ronnie Butiong, ADB’s senior regional PRC. “We have a daily boat service between cooperation specialist for the GMS. Jinghong and Chiang Saen,” she says. “Chinese fruit is more in demand during Ratification in Thailand involves internal winter, while other products sell all-year approvals that may go through in 2009. round.” Moreover, implementing the CBTA will also take time as training is required at central, One attraction for river traders is the one- provincial, and border levels, adds Butiong. stop service offered at the port. This means that customs, immigration, and quarantine inspections are conveniently carried out in the same location. • Vendor Sukanya Antideh in Chiang Saen: Produce arrives daily from the PRC

“Our river trade remains strong,” says Polpol Others are concerned that the rise in living Manamontreekoul, mayor of Chiang Saen. standards—partly due to increased cross- In contrast, he says, tourist arrivals are not border trade—benefits some parts of society, growing much, despite the many ancient while bypassing others, including hill tribes temples, some relatively well-preserved, on both sides of the border. that the former kingdom has to offer. The mayor adds, however, that the city still “Highland people may not want the same needs to restore many temples and also lifestyle as lowland people, nor can they needs to improve marketing to attract Thais take advantage of better connectivity the as well as foreigners. way others can,” observes Choen Krainara, a policy and planning analyst with Thailand’s In Chiang Rai, the nearest sizeable city to National Economic and Social Development the border, the governor established a “sister Board. “But they should have similar access city” relationship in 2007 between the eight to social services. There should be more provinces of northern Thailand and the PRC’s community-based enterprises to improve head north Visitors Crossing the Mekong Yunnan Province. This agreement has already health and education, especially in the less 41 led to joint ventures, mostly involving developed countries.” transport and logistics, says Pattana. Since both regions are rich in tourism resources, Meanwhile, some entrepreneurs are further links can be expected. exploring, not just cross-border trade ties, but also links in “soft” areas such as training. Chiang Rai, which has a significant number of residents of Chinese descent, has turned Chiang Rai’s Pattana, for example, knows from a small market town into a boom he cannot compete with the PRC in his line city since the early 1990s. Inevitably, such of business, which is kitchenware, so he is development has led some to bemoan the looking for opportunities in human resource loss of traditional culture. “Chiang Rai is development. “Maybe we can sell skills becoming more like Bangkok every day,” through local organizations,” he says. says artist Chalermchai Kositpipat, known as “Thailand’s Gaudi” and architect of It seems only a matter of time before cross- Chiang Rai’s innovatively designed Rong border cooperation moves into the “soft” Khun temple. “Of course, I am sad to see side of cooperation, such as education in all increasing consumerism and a decline in fields, as well as cultural exchanges.  traditional spiritual values.” hon yN Qu Dietri Dung Quat Da Lat Yulin inh City Pleiku Da Nang n iM VIET NAM onki Qinzhou Hue Fangcheng Ho Ch ai Dongxing fofT A Dong Ha Mong Cai MocB Gul A worker in an auto parts A factory in Phitsanulok: Businessman Vanchai Chittamanontkul says he can compete on price as well as quality hong Phouvong • AUTONOMOUS REGION Salavan Nanning Pingxiang HaiP Bavet Pakse Kep Ninh Binh Vinh ghi Kampong Cham uN Youyiguan inh Business people sayBusiness people a logistics centerthey need more private to attract sector enterprises Stung Treng Lang Son Hu Thakhek Kaysone Phomvihane CAMBODI ap aB Thanh Hoa eS Ho ai HA NOI a nB ong Tonl Ye PHNOM PENH Kalasin KohK Hekou Poipet Lao Cai Trat Nong Khai Udon Thani Khon Kaen d Yuxi Gejiu PEOPLE’S REPUBLIC OF CHINA Loei Mohan ailan Boten VIENTIANE h Aranyaprathet Luang Namtha Chaiyaphum LAO PEOPLE’S DEMOCRATIC REPUBLIC Pu’er Sattahip fofT HAILAND Nateuli Uttaradit Phrae T Khong Gul Chiang Houayxay Chonburi Daluo Phayao Jinghong Prachuap Khiri Khan Phitsanulok BANGKOK Ayutthaya ai Denchai Sukhothai Lampang Tachilek Mengla YUNNAN PROVINCE Chiang Rai Kengtung MaeS k Phet Myeik Ta Mae-Sot Salween (Thanlwin) Chiang Saen Nakhon Sawan Kamphaeng Muse Ruili Thibaw Ye Dawei Lashio

Impact Stories f 42

Mawlamyine AW NAYPYID

Mandalay EA Gulfo Martaban

y yawad ye Yangon

A n NS MYANMAR mu NDAMA A o 10 North−South Economic Corridor Thailand

Phitsanulok— A Regional Hub? Phitsanulok— Phitsanulok— Hub? Regional A

43

hitsanulok, Thailand: Phitsanulok, 90,000 people, is surrounded by provinces which lies in the central plains of rich in agricultural and ecotourism Thailand, seeks to expand beyond potential. It’s also an hour’s drive from its role as a distribution base for the heritage city of Sukhothai, which middleP and northern Thailand. It also wants draws up to a million visitors a year. They to be the first non-border city to act as a note that Phitsanulok is well-placed to distribution—and maybe manufacturing—hub distribute processed agricultural products, for the Greater Mekong Subregion (GMS). or raw materials like rubber, as it is at the intersection of two major GMS economic Its supporters say the historic city on the highways—the East−West and North−South river Nan, with a population of nearly Corridors. It’s true that Phitsanulok lies midway between Myanmar to the west and the Lao People’s Democratic Republic (Lao PDR) to the east, as well roughly halfway between Chiang Khong in the north and Bangkok in the south. But critics argue that the city’s distance from any port is the major weakness of its ambition. Besides, they add, the city is 30 kilometers east of North−South corridor and is bypassed by most traffic along that road.

Nonetheless, Phitsanulok is keen to build a 200 million baht ($5.7 million) logistics center close to road and rail facilities and the airport.

“We have had this plan for some years, but it has been delayed by political problems,” says Wises Wachirasrisirikul, chairman of the Phitsanulok Chamber of Commerce. The government’s Department of Land Transport is supportive, he says, but gives priority to the border towns.

• Processing bananas in Phitsanulok has some 300 small and medium Phitsanulok: Dried products enterprises, most in distribution and a small go the PRC and Lao PDR but growing number in production.

In one factory with 30 staff, for example, Heritage-rich Sukhothai draws • Siri Vanasuwanich is processing bananas, a million visitors a year: Only

Impact Stories an hour from Phitsanulok tamarind, and corn, all grown locally. His products appear mainly in department stores around Thailand, but he also exports dried bananas to the People’s Republic of China (PRC) and Lao PDR despite high transport costs.

44 At present, Vanasuwanich uses a transport company that takes his exports by road the long way down to Bangkok and up again to the port of Nong Khai by the Lao PDR border. He has looked at the Vietnamese market but says the transport costs are too high.

These arrangements may well change when Vanasuwanich opens a factory in Luang Prabang in northern Lao PDR—much closer to the PRC—with Lao partner Khattaphon Phommapangna. Using local green bananas, which are cheaper than in Thailand, the joint venture enterprise plans to export 80% of its output. Currently under construction, the factory aims to export under Lao PDR’s Generalized System of Preferences (GSP) with France and other European Union countries. • Making auto parts in a Phitsanulok factory: Exporting to GMS neighbors

In another Phitsanulok factory, Vanchai business representative who imports Chittamanontkul is making auto parts, oxygen equipment. including alternators and electrical components. “We can collect rubber from the north and northeast, and either make rubber products With a staff of 150 and a turnover of or export the raw material by road to Yunnan $3.4 million in 2008, Vanchai supplies the and Sichuan provinces and the port city of domestic market and exports to Mekong Chongqing, one of the PRC’s major auto and neighbors as well as to Europe and the motorcycle manufacturing centers,” he says. Mideast. He sends products along the Phitsanulok— Hub? Regional A East−West Corridor to the PRC, Myanmar, Critics say that Phitsanulok hasn’t got 45 and central Viet Nam, and through the sufficient labor resources to develop as North−South Corridor to Cambodia and an industrial base. Pongsutt concedes southern Viet Nam. that it isn’t easy developing home-grown entrepreneurs in a primarily agricultural Chittamanontkul is also considering an region, but notes that the government is offer from a courier company to transport providing incentives, including “incubation goods to the PRC in 6 days door-to-door. centers” for budding entrepreneurs at local “I can compete with the PRC in price as universities.  well as quality,” he says. He sees further opportunities among his GMS neighbors.

But businesspeople say they need government investment in a logistics center to attract more private sector manufacturing enterprises. With an eye on the People’s If and when this happens, Phitsanulok Republic of China, Phitsanulok could also develop as a “rubber city,” says Singha Pongsutt, a prominent local could develop as a “rubber city.” Nanning Hekou Pu’er Youyiguan Pingxiang Qinzhou Lao Cai HuuNghi Fangcheng Jinghong Lang Son Dongxing YenBai Mong Cai Daluo Kep Mohan HA NOI Nateuli Boten HaiPhong HoaBinh Luang Namtha Houayxay Ninh Binh ai LAO PEOPLE’S GulfofTonkin Saen Chiang DEMOCRATIC REPUBLIC Thanh Hoa Rai Khong Luang Prabang

Phayao Vangvieng Vinh Pakkading VIENTIANE Ban Lao Phrae Nong Khai Loei Nakhon Phanom Thakhek

Impact Stories Uttaradit Udon Thani Dong Ha Hue Mukdahan Khon Kaen Kaysone Phomvihane Da Nang Phitsanulok Salavan T HAILAND Dung Quat Chaiyaphum Pakse Sawan Phouvong VIET NAM 46 Dietri

QuyNhon Ayutthaya Pleiku Stung Treng BANGKOK Poipet Siem Reap • Stone carver An Theoun:Brings in whiter stone from the north Chonburi CAMBODIA TonleSap Da Lat Sattahip Trat Kampong Cham

Illegal crossings and casesGul offofT hailand KohKong Prachuap Khiri Khan PHNOM PENH MocBai HIV/AIDS infections are down Bavet Ho ChiMinh City Sre Ambel Kampot o Vung Tau 10 00'N at border areas. Sihanoukville Chumphon Ha Tien Can Tho

Ca Mau

NamCan Southern Economic Corridor Cambodia Bolstering Tourism Bolstering Tourism

47

The completion of an upgraded highway between Poipet and is helping trade and tourism in Cambodia

oipet, Cambodia: Locals describe back streets, home to most of the town’s Poipet, Cambodia’s northwestern impoverished residents. border town with Thailand, as “a mixture of heaven and hell.” Heaven Tourists arriving at Poipet by land from isP inside the half dozen glitzy casinos, where Thailand still face long lines in small and food and drink flow for Thai day-trippers at crowded immigration and customs facilities, the gaming tables. Hell lies outside, in the as well as a swarm of touts outside offering a makeshift shanties along garbage-strewn bewildering array of services. As a gateway to Cambodia, “Poipet damages our reputation,” Further plans involve a $32 million complex says one official. that will include a cargo terminal, shops, and a hotel, says Kung. As part of the deal with But all this is changing. The number of the government, his firm will also build new visitors coming through Poipet is likely to customs and immigration buildings. grow following the 2008 completion of a 50-kilometer (km) surfaced highway to Serei In addition to sprucing up its image, Poipet Saophoan. This upgrading means that tourists is seeing a decline in other activities that can now travel on good roads from Bangkok often characterize border towns. Illegal to Phnom Penh and Ho Chi Minh City. Many crossings—including trafficking—are down, stretches along this GMS Southern Economic according to Poipet’s deputy police chief, Corridor have been rehabilitated with support Din Daro, partly because of a crackdown by from the Asian Development Bank (ADB). Thai authorities. Rates of HIV/AIDS infection, which often originate in the town’s red-light To meet demand, Poipet is taking a number establishments, are also dropping, says Daro, of steps to clean up its act. A $10 million due to condom promotion campaigns by NGOs passenger terminal is due for completion by and the government. the first quarter of 2009. “This is an area where tourists can rest and plan their onward Under normal circumstances, cross-border journey in an organized and transparent trade would also be increasing but, in fact, manner,” says Kung Hun Thearith, a senior it has slowed due to both the economic official with the Cambodian firm that is downturn and a border dispute that erupted building the terminal. “It will replace the last year between Thailand and Cambodia chaos that tourists currently face.” over the 4.6 square km stretch of land near

Many farmers are switching from buffaloes to tractors, which are imported from Thailand. Impact Stories

• Poipet border crossing: Planned revamp for facilities

48 Primary school teacher the temple that sits on a hilltop • Chouy Chakrya: Cleaner straddling the border. children, faster traffic

“This is a blip of nationalism which overrides economic self-interest for a short while,” says Arjun Goswami, ADB’s country director for Cambodia. “Cambodia knows it is in its interest to integrate with its neighbors.”

Even with the conflict, cross-border entrepreneurs are taking advantage of the improved road. In Serei Saophoan, Im Malis imports tractors from Thailand through Poipet and sells them to local farmers. “Many Cambodians are switching from buffaloes to tractors,” says the businesswoman. “They use tractors for transport as well as plowing and say tractors are less prone to theft than buffalos.” Im sold 1,000 tractors in 2008, including some cheaper Chinese tractors brought in through Phnom Penh.

As she talks, two farmers, brothers Bun Leay and Keo Tek, are making their first purchase of a Thai tractor. They say it will enable them to cultivate an extra crop a year—either rice or cassava—which they plan to sell at the border town of Chamcar Kor, 35 km from their farm.

• Traditional bullock and cart on the road to Phnom Penh: Travel is easier and faster on an all-weather road Bolstering Tourism

49 • Ferry crossing at : A bridge would remove this bottleneck

Impact Stories If the GMS could follow the model of Europe’s Schengen visa, the number of visitors across Cambodia would increase very quickly.

50 The new all-weather road is helping users of Local entrepreneurs are quarrying rocks to all kinds. At the Veang Muong primary school, dispatch by road to construction companies. 25 km out of Poipet, teacher Chouy Chakrya Halfway between Siem Reap and Phnom Penh says that when the national road outside was in , the village of a dirt track, children arrived mud-spattered Sam Nak is a community of carvers, making in the rainy season or dust-covered in the dry Buddhas and animals out of stone from the season. “Now they arrive in a better condition nearby Santuk mountains. One owner of to study,” she says. But she also notes that the a small enterprise, An Theoun, says he is children are more afraid of the faster traffic bringing higher-quality, whiter stone by road and increased accidents. Two pupils sustained from the north as well as sending his products head injuries after being hit by a car recently, all over the country. she says. Improved road access to Siem Reap is All along the highway, farmers taking crops contributing to explosive development around to the mill or villagers catching fish with the ancient kingdom of Angkor. “The speed of nets—or their hands—from ponds are using development, especially the roads, is fantastic,” the newly-surfaced road to their advantage. says Didier Lamoot, general manager of a 5-star hotel in Siem Reap. “Cambodia has • Casting a net: Fishermen also use the road

come from nowhere very fast. We are still Little more than a decade ago, Siem Reap mainly a transit stop between Thailand and had few vehicles. Today, traffic packs the Viet Nam, but once we develop our beaches, main street, which is lined by several big we will be a destination in our own right.” hotels. However, while some are benefiting from the tourism boom—and soaring land A Frenchman, Lamoot says if the GMS could prices—much of the local population is follow the model of Europe’s Schengen visa, excluded, says Kheng Leak Sophy, who was Bolstering Tourism which allows tourists to visit many countries born in Siem Reap and recently opened a 51 with a single visa, “We would see the number 36-room hotel. “Most residents still lack food, of visitors across Cambodia increase very clean water, and electricity,” she says. quickly.”

“Cambodia has come from nowhere very fast. We are still mainly a transit stop between Thailand and Viet Nam, but once we develop our beaches, we will be a destination in our own right.”

—Didier Lamoot General Manager of a 5-star hotel in Siem Reap One enterprise showing the way is , which trains hundreds of villagers, including the disabled, to make silk, stone, and wood crafts. Established as a development project in Siem Reap, the company is now self-financed and making a small profit, says manager Hep Chann Kosal.

Another example is the Sala Bai Hotel and Restaurant School in Siem Reap that provides 100 underprivileged Cambodians a year with skills that range from cooking to table serving and accounting. Sponsored by donors, the school is under pressure to be independent, says program manager Ampor Sam-Oeun, but is still too small to be commercially viable.

East of the capital Phnom Penh, tourists and traders are also increasingly using a highway to Viet Nam. Improvements to the road in recent years have reduced the journey to 3 hours, including a ferry crossing at Neak Loeung. Even this bottleneck may be removed if plans to build an $80 million bridge reach fruition. • Trainees at the Sala Bai Hotel and Restaurant School in ADB upgraded the road between Neak Loeung Siem Reap: Skills for the and the border town of Bavet, but it hasn’t all underprivileged

Impact Stories • Weaver at Artisans Angkor: Opportunities for the poor

52 been smooth going. Some villagers resettled As well as casinos, under the project complained of inadequate compensation, late payments, and loss of Bavet has a dry port livelihood. In response, Karin Schelzig Bloom, an ADB social sector specialist in Phnom Penh, and an economic zone says, “To ensure sustainable livelihoods in the post-construction stage, we hope to develop where raw materials a livelihood support program for poor people living along the highway to help them connect are turned into finished to the opportunities an improved road should bring.” products.

Meanwhile, rapidly developing trade and tourism links with Viet Nam are transforming Bavet. In addition to its share of casinos, Bavet immigration chief Lieutenant Colonel Bavet has a dry port and an economic zone Khuoy Kry says border crossings have jumped where Taiwanese firms turn raw materials fivefold from between 100 to 200 a day from Viet Nam into finished products and send in 2004 to around 1,000 a day in 2009. He them back to Ho Chi Minh City along an ADB- attributes much of this to the highway that financed expressway. was inaugurated in 2005, along with new customs and immigration facilities. Traders at Bavet’s downtown market are also gaining from increased cross-border activity. Watching the tour buses passing by, Khuoy Shop owner Chea Kung sells shirts and shoes adds that close cooperation with their made in the People’s Republic of China, Vietnamese counterparts not only facilitates Thailand, and Viet Nam. Interestingly, he says the flow of legitimate passengers and goods, the better-quality Thai goods sell best even but also keeps drug-smuggling and trafficking though they are more expensive. at minimal levels. 

• Immigration chief Lt Colonel Khuoy Kry (right) at Bavet: Border crossings have risen fivefold Bolstering Tourism

53 wo Cambodian entrepreneurs—a buys cheaper Chinese models that come woman trader and a refugee-turned- through Phnom Penh. businessman—represent the kind of home-grown private sector talent The recently-paved road from Poipet to Tthe country urgently needs to lead growth. Serei Saophoan makes delivery easier and faster, but she has also noticed an increase Both are involved in cross-border businesses in the accident rate. More worryingly, she that are expected to increase with says farmers who have prospered in recent strengthening economic cooperation among years are being affected by a clampdown the Greater Mekong Subregion countries. on Cambodian goods at the Thai border. She is extending payments for those having After marrying in 1990, Im Malis moved difficulty with meeting installment payments to Serei Saophoan, the home town of on their tractors. her husband, Heng Vuthy. Initially, they traded steel products, like sliding doors. Banteay Meanchey is a former Khmer Rouge A fire destroyed their business in 1993 and, stronghold and Im, now 40, recalls sheltering while planning a fresh start, Im spotted under the house during shellfire in the early an opportunity. 1990s. But the situation has been stable since 2000, she says, and many of the soldiers- “The soil in this region is good for growing turned-farmers are “straight” to deal with in rice, but the farmers had troubles when business. using buffalo or oxen to plow the earth,” she says. “I saw these mid-range tractors in In the tourism sector, Kung Hun Thearith, Thailand and began bringing them in. When 51, is a senior executive in a firm that is the villagers tried out the tractors, they sold developing passenger and cargo terminals in their buffaloes, which were prone to being Poipet and a freshwater port in Siem Reap. stolen and taken across the border.” He survived the Khmer Rouge era, emigrated She began importing tractors in batches of to New Zealand and Australia for 15 years, and 10 once or twice a month in 1994. Last year, returned in the early 1990s to help his country

Impact she sold 1,000 tractors. Although most of her rise from the ruins. The period from 1976 to customers are from Banteay Meanchey, she 1979 had not only devastated Cambodia’s also distributes to neighboring infrastructure but also its educated classes.

Stories and Siem Reap. Most of her tractor brands come from Thailand via Poipet, but she also

54 After a rollercoaster stint in politics, a businessman is developing passenger and cargo terminals at Poipet and Siem Reap Trail-Blazing Entrepreneurs • Entrepreneur Im Malis: Replacing buffaloes with tractors Cross-Border Entrepreneurs

55 • Business executive Kung Hun Thearith: Developing passenger and cargo terminals Kung describes his family’s escape from the fate that befell most intellectuals under the Khmer Rouge as “miraculous.” His father was a prominent teacher—one of the professions targeted for elimination—and this was known to the authorities.

Perhaps his family was spared because his father once taught Nuon Chea, ’s top henchman and known as “Brother Number Two,” speculates Kung. Or perhaps it was because his father and grandfather had been well-known for their contributions to the community, he adds. The real reason remains a mystery. After the Khmer Rouge were toppled, Kung and his family fled to a refugee camp at the Thai border and went from there to New Zealand and, later, Melbourne, Australia, where many of his family still live.

After returning to Cambodia, Kung at first sought out a career in government. After obtaining an interview with a leading figure in one of the main political parties, he secured a senior position in the administration. But in the volatile world of Cambodian politics, his career fluctuated with that of his patron. He left politics in 2006. “Fed up, I retired to a farm in Siem Reap. I wanted to enjoy my first freedom in nearly 10 years,” he recalls.

But later that year, businessman Var Chhouda asked Kung to join him as his executive assistant. Now their enterprise is helping the government provide much-needed infrastructure for a tourism sector that is largely dependent on cross-border cooperation. Of Cambodia’s 2.15 million foreign visitors in 2008, 33% came through Thailand and 29% through Viet Nam, • Brothers Bun Leay and Keo Tek according to the Tourism Ministry.  buy a Thai tractor: Will sell their crops across the border

• New highway from Poipet to Impact Stories Serei Saophoan: All-weather access helps local as well as regional traffic

56 GREATER MEKONG SUBREGION ECONOMIC CORRIDORS

o 98 00'E 108o 00'E

1 Profiles of Cross-Border Activity

Guilin 6 GUANGXI, PRC Gateway to the South I NDIA Myitkyina Dali Hexian o Chuxiong Kunming 24 00'N Longshuanka Wuzhou VIET NAM Mangshi Baise GUANGXIZHUANG 10 New Dawn in Highlands Ruili Yuxi AUTONOMOUS REGION 24o 00'N Tamu YUNNAN PROVINCE Tonzang Muse PEOPLE’S REPUBLIC OF CHINA Gejiu Yulin Nanning Chindwi 16 VIET NAM Hill Tribes Rely on Tourists Lashio Salween (Thanlwin) Hekou Pu’er Youyiguan Pingxiang Qinzhou Lao Cai HuuNghi nR Thibaw Fangcheng . Jinghong Lang Son Dongxing YUNNAN, PRC Business on the Move YenBai Mong Cai

20 BANGLADESH Mandalay Mengla Daluo Kep Mohan HA NOI Kengtung Nateuli Boten HaiPhong HoaBinh Loilem Tachilek Luang Namtha Houayxay Ninh Binh MaeSai LAO PEOPLE’S GulfofTonkin MYANMAR Chiang Saen Chiang DEMOCRATIC REPUBLIC Thanh Hoa NAYPYIDAW Chiang Rai Khong Luang Prabang Pyay Phayao Vangvieng Vinh Chiang Mai Table of Contents Pakkading A Ban Lao y VIENTIANE e y Phrae a Lampang w Nong Khai

a d Denchai Loei Nakhon Phanom Thakhek y Uttaradit Udon Thani Dong Ha Sukhothai Hue Pathein Tak Mukdahan Khon Kaen Kaysone Phomvihane Da Nang Phitsanulok Yangon Mae-Sot Kalasin Salavan Mawlamyine Kamphaeng T HAILAND Dung Quat Phet LAO PDR Opening Up a Tranquil Land Gulfof Chaiyaphum Pakse 26 Nakhon Sawan Phouvong VIET NAM Martaban Dietri Ye Nakhon Ratchasima

QuyNhon LAO PDR Better Access to Health Care Pleiku 32 Ayutthaya Dawei Stung Treng A NDAMANSEA BANGKOK Poipet Siem Reap Aranyaprathet THAILAND Crossing the Mekong Chonburi CAMBODIA 36 TonleSap Da Lat Trat Myeik Sattahip Kampong Cham THAILAND Phitsanulok—A Regional Hub? GulfofThailand KohKong 42 Prachuap Khiri Khan MocBai PHNOM PENH Bavet Ho ChiMinh City Sre Ambel Kampot o Vung Tau 10 00'N CAMBODIA Bolstering Tourism Sihanoukville 46 Chumphon Ha Tien o 10 00'N Kawthoung Can Tho

Ca Mau 54 CAMBODIA Cross-Border Entrepreneurs Surat Thani NamCan N National Capital City/Town Phuket Corridor Chronicles was conceived by Ronnie Butiong and coordinated by Charisse Tubianosa. Ian Gill wrote 050 100 200 300 Greater Mekong Subregion Trang the stories and took the photographs, with the invaluable assistance and guidance of Lei Kan, Dang Huu Cu, Songkhla Economic Corridors Kilometers Asian Highway Network Souphavanh Phonmany, Roykaew Nitithanprapas, and Chantha Kim. Design by Tony Victoria, Ronnie Elefaño, HatYai Narathiwat River and Keech Hidalgo; typesetting by Aileen Magparangalan and Edith Creus. Yala Provincial Boundary International Boundary NOTE: In this publication, “$” refers to US dollars. Boundaries are not necessarily authoritative. Currency equivalents are as of December 2008. MALAYSIA 98o 00'E 108o 00'E Corridor Chronicles—Profiles of Cross-Border Activities in the Greater Mekong Subregion

This is a colorful account of a 19-day journey along the new or upgraded economic corridors linking members of the Greater Mekong Subregion. Based on conversations with ordinary folk, especially entrepreneurs, these stories show how trade and tourism in particular are burgeoning with improving connectivity between People’s Republic of China’s Guangxi and Yunnan provinces, Viet Nam, Lao People’s Democratic Republic, Thailand and Cambodia.

About the Greater Mekong Subregion (GMS)

The Greater Mekong Subregion (GMS) is made up of six countries—Cambodia, People’s Republic of China, Lao People’s Democratic Republic, Myanmar, Thailand, and Viet Nam. In 1992, these countries launched a program of subregional economic cooperation to enhance their economic relations, building on their shared histories and cultures. Focusing on “three Cs”—connectivity, competitiveness, and community—the GMS is closely involved in pursuing high-priority subregional projects in nine sectors. These are transport, telecommunications, energy, environment, agriculture, tourism, trade facilitation, investment, and human resource development.

About the Asian Development Bank

ADB's vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region's many successes, it remains home to two thirds of the world's poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration.

Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. CORRIDOR CHRONICLES Profiles of Cross Border Activities in the Greater Mekong Subregion

Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org Publication Stock No. ARM090137 Printed in the Philippines